Microcredit And Mechanism Design
AbstractIndividual microcredit loans are not necessarily simple fixed debt obligations, but rather may have contingencies and procedures suggested by the theory of mechanism design. Further, group or joint-liability lending may not be the single miracle cure practitioners claim nor operate the way the logic of a single theory might suggest. There are multiple theories, these theories can be distinguished in data on repayment rates, and the best-fit theory may vary with the environment. Finally, the debate about whether to lend to individuals or lend to groups may be misplaced. Under simple theories of selection, the Pareto superior regime, which is predicted to emerge, varies with exogenous environmental characteristics. (JEL: D5, D82, G2, O17) Copyright (c) 2003 The European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 1 (2003)
Issue (Month): 2-3 (04/05)
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Find related papers by JEL classification:
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G2 - Financial Economics - - Financial Institutions and Services
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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